Fire Merger 06.27.16
Recently the City of Stuart voted not to proceed with the Merger discussions with Martin County. For years the MCTA has pushed for a merger between the City and the County. The reason for the push...taxpayer savings. In 2014 the MCTA made the prediction that there would be over $1,000,000 in savings immediately if the two departments merged and this savings would only increase over time. Since that time a consultant was hired and the merger study began. As the information began to unfold it became clear the savings would be much greater than $1,000,000.
As with any study, the devil is in the details. When the consultants plugged in average assessments, they used the same average for the city and the county. Unfortunately this is not reality. They also used an incorrect number for the costs currently associated with the City of Stuart’s fire/rescue department.
However, the greatest void in the study was the lack of salary and benefit package comparisons between the two departments. In the past few years the City of Stuart has trimmed their operations and developed a more efficient model of operations. Additionally, they realized that nearly 50% of the incorporated properties were not paying into the system due to low assessments. This realization caused the passage of a fire assessment tax that would require all properties to pay into the department.
According to the studies we have reviewed, the County pays their Fire/Rescue department an average of about 20% more per employee than the City of Stuart. This is a significant difference, and contributes to the imbalance between the departments.
It would have been helpful if the study would have considered these differences and made recommendations to balance these salaries and benefits. Additionally, the study should have used real numbers for the average property assessments. If that would have been taken into consideration the discussions about the merger might have continued. Instead, basically, the study simply concentrated on closing stations, sometimes without enough thought to response times.
The MCTA continues to believe that the potential merger could produce huge savings if done properly. However, to accomplish that, the consultant must review the discrepancies discussed above. Real assessment numbers and salary/benefit discussions have got to be included in the study. Additionally, management and operations must be a part of the discussions. It is not about simply closing stations.
Interestingly, nearly 80% of all calls into fire/rescue are medically related. This statistic alone should cause a paradigm shift in the manner the departments operate.
The MCTA believes there are considerable savings that could occur without a reduction of the level of service if the departments were merged in a logical professional manner.
And finally, the City of Stuart and Martin County must begin to develop a better, more trusting environment between each other. There will never be any mutually beneficial projects to consider if there is no trust. And ultimately, at the end of the day, this costs all the taxpayers more money.
What is the Capital Improvement Plan 03.07.16
One of the most important, but often overlooked, elements contained in local government budgets is the Capital Improvements Plan, or CIP. A Capital Improvement Plan (CIP) is a multi-year planning instrument used to identify needs and financing sources for public infrastructure maintenance and improvements. Public infrastructure reflects capital improvements required to provide the level of service adopted in our Comprehensive Plan. They include roads and bridges, parks, beach access, buildings, fire engines and police cars, anything that has a life span of three years or more and costs in excess of $60,000. The level of service is a measurement adopted to try to assure a quality of life standard, i.e., library books per person, acceptable traffic congestion, fire and emergency response times, acreage of parks required per person, a wide variety of things desired by our citizens.
The County Administration has posted a guide to the CIP as approved by our County Commission. It says, "Martin County provides necessary and desired public services to the community and the purpose of the CIP is to facilitate the orderly planning of maintaining, preserving, and protecting the infrastructure system that is utilized for those public services.” The CIP is a proposed schedule for the expenditure of funds to maintain, acquire, or construct these necessary improvements over the next ten-year period. This plan provides the public, residents, and stakeholders transparent information on how the County plans to address significant capital needs over the next ten fiscal years.
The CIP offers a comprehensive outlook of countywide needs by:
• Maximizing the uses of revenue to reduce the burden of the taxpayers
• Encouraging efficient government by interdepartmental coordination
• Maintaining a fiscally sound and consistent financial program
• Guiding anticipated growth and development needs
• Enhancing opportunities for federal or state grant awards
The CIP represents a comprehensive and direct statement of the physical development policies of Martin County. The County has a comprehensive process for capital improvement planning and budgeting and this process is guided by the Capital Projects Policy.
The CIP is the link between planning and funding the construction of our anticipated needs. It is guided by Section 14.4 of our adopted Comprehensive Plan. It plans for public facilities based on projected population. It is a ten year Plan, meaning that it looks forward ten years, the first year of the plan is the foundation of the plan that is what gets built next year. The first five years of the plan have to be fully funded and can be relied on by our citizens. The CIP is built using a weighted process with emphasis on eliminating public hazards, replacement of obsolete structures/equipment, maintaining the adopted “Level Of Service” and reducing operational costs.
The process is supposed to be a technical decision but, as with many things, it can become political. This is where you as a taxpayer and MCTA as a taxpayers organization can get engaged. Martin County will soon release it draft CIP for 2017, and will hold hearings in April to determine priorities. Knowing that funds are limited, our goal is to insure the priorities are met and critical capital improvements are completed.
Not All Aboard Florida 03.16.16
This week’s events on the FEC tracts provided us with a glimpse of what can happen when there is an accident on the rail line...two lives were lost.
At the time of this writing, there is not enough information to know exactly what caused the accident. However, what we do know is that a freight train and a truck had a collision and the individuals in the truck were killed.
The crossings were closed for over 4 hours between Indian Street and Cove Road. If the train was longer (as predicted for future freight trains), the crossings could have been affected from the St. Lucie River all the way to Cove Road. Add to that the fact that FEC could have been carrying hazardous materials and we have a perfect storm getting ready to happen.
The MCTA has been opposed to All Aboard Florida and increased rail traffic and has been an advocate for planning some sort of mitigation to help counteract the increased train traffic. Whether or not “All Aboard Florida” or “Brightline” as it now called, is successful we must have an alternative way to cross the tracts. Planning an overpass or underpass does not happen overnight. We have been given plenty of notice that the freight traffic is going to pick up along with the number of trains as well as the length of the trains. It is time to have a conversation about alternatives.
Martin County recently had a study on a majority of their real property holdings and we do not believe that the idea of an underpass or overpass was even mentioned. Not uncommon since the experts were from out of the area. It is virtually impossible to know what a community needs when you do not work or live in the community.
As it stands, Martin County owns property on the NE corner of Indian Street and the FEC. Additionally, Martin County owns property on the NE and SE corners of Monterey and FEC.
Both of these intersections have potential for some sort of underpass or overpass. That is not to say that there should be additional mitigated crossings in our south region. If we do not begin to look at this seriously, we will be reacting instead of being proactive. Reactive behavior historically cost more and is much less efficient.
We cannot afford to put our community at risk if there is a horrific train accident with no way out. Minutes become critical when you have had a heart attack, stroke, or have been in an accident.
We urge the county to take the lead on this very important issue. They own the land and have the staff to begin the study.
Possibly we could get ahead of the curve if we begin to act now. Crossings will be blocked and delays will happen. Property values are certain to decline with the simple fact that there will be additional freight trains (notwithstanding the high speed passenger trains). If we can mitigate this problem we will all be safer and our quality of life, although diminished, won’t be disastrous.
Government Sustainability 01.20.16
Sustainability is a concept that is discussed regularly these days. We often think of energy, food or durable goods when we think of sustainability. However, the Martin County Taxpayers Association believes that our local governments should consider this concept when developing their budgets.
Martin County has some of the highest real estate values on the Treasure Coast. These values along with FPL’s extensive real estate holdings translate into higher revenue for our local governments. If it were not for the high end real estate and FPL’s contribution to our base our real estate taxes would be prohibitive.
The irony is, even with the above mentioned contributors we continue to have one of the highest millage rates in the area. We recognize that we have an inlet and shoreline to protect, however, the tax base is strong enough that we should have one of the lowest millage rates not the highest.
There are many factors that are contributing to our increased cost of doing business in Martin County. Using our capital in the past to cover operations was a huge contributor to our $258 million capital shortfall. A seemingly endless number of law suits continue to plague our county. This not only takes time away from our legal department to perform day to day activities, it also costs large sums of money to hire outside firms that specialize in a particular area.
We (the MCTA) have often thought of our local government as a business. The government’s business should be to perform certain services for the taxpayers at a reasonable cost with accountability. This works well when you have stock holders that demand accountability. Taxpayers on the other hand have other priorities and simply cannot attend meetings to voice their concerns and get engaged.
The county recently had a workshop to determine other ways to generate revenue. There is not a problem with these types of discussions, however, there should be an equal amount of time invested in ways the government can trim costs. By way of example, our local government owns an incredible amount of real estate that is not in use and there is no projected use. This again translates into income, whether there is a decision to sell or lease.
There are many constructive ideas about saving taxpayer money. Our county is blessed with an inordinate number of very successful CEO’s, COO’s and CFO’s that would be glad to develop a sustainable plan for our local governments...if only asked.
Martin County is at a critical juncture. We have over $250 shortfall in our capital programs, All Aboard Florida is knocking at our door, and we have discharges in our estuaries that if not remedied will continue to adversely affect our real estate values as well as our tourist industry.
We do not think that anyone believes the capital shortfall can be solved by increasing our mileage. The shortfall is simply too large.
As somewhat of a short term plan, the MCTA believes the county should keep the millages flat. We already have a $9,000,000 increase in revenue due to additional properties coming on line and increased property values. And, immediately, the commissioners should hold town hall meetings in their respective districts to present their ideas concerning the capital shortfall. This is imperative. The taxpayers deserve to have a say in the outcome of this challenge. And who knows, there may be some ideas they haven’t considered.
County’s Owned Real Estate Study 02.24.16
Martin County has recently received the report from CB Richard Ellis (CBRE), their consultants concerning the county’s facilities and real estate holdings. MCTA has advocated this study by an independent professional organization to give the county’s leadership objective, non bias information pertaining to their real property ownership. This includes 550 parcels inside the urban service area and 5,400 outside the urban service district.
At a time where ad valorem revenues are critical to the county, there is now a basis from which a dialogue can occur concerning the use of county owned property. Additionally, CBRE placed values on selected sites based on current market sales.
MCTA advocated for this study because the county holds title to many different parcels of property and many of them may have little or no use to the county. Some, on the other hand are critical either to the county, utilities, drainage, etc., that provide benefits to the taxpayers.
The report brings up some interesting discussions concerning the county owned golf course, the administrative buildings (owned and rented) and multiple vacant parcels. Most of these properties are important to the county’s operation, recreation and some are environmentally sensitive, while some are simply parcels that seem to have little or no relevance to the county’s operation.
We would caution the county to take the necessary time to digest this report and possibly have town hall meetings discussing the outcome of the study in an effort to get feedback from the taxpayers. Selling or renting county owned assets may seem like a slam-dunk when it comes to raising money to reduce our capital shortfalls, however, the MCTA association cautions the county that selling assets to pay for operational shortfalls may not be a healthy resolve. We call the capital shortfall an operational one due to the fact that the county used capital funds to shore up operations during the recession, thus we have the $250 million shortfall.
The county is just beginning the budgetary process for the upcoming year. Part of this process should be to identify possible reductions in the budget that could be used to gradually reduce the capital shortfall. We have had an increase of $9 million of revenue from increased real estate values, either by appreciation or the addition of new residences and commercial buildings that have come on line. Additionally, there should be an increase of revenues of approximately $9 million in FPL franchise fees that have also recently been approved by the county.
With the failure of the sales tax referendum last year the county has had to look at all possible strategies to reduce the capital shortfall. Some of these strategies included increased millages and FPL franchise fees. However, the biggest challenge facing us is our increases in expenses across the board.
$18 million is a far cry from the $250 million shortfall, however, if you reduce the budget by as little as 5% the county could then have an estimated $33 million to dedicate to the reduction of the shortfall.
The MCTA believes that the county should use the report to begin discussions on their real estate holdings and dispose of the properties that are of no consequence to the county. Recognizing that properties close to the rail crossings like the Indian Street (Fair Grounds Property) may be needed to mitigate the closings that will inevitably occur when and if the rail traffic increases. We need to think long term, 20 - 50 years out.
Martin County School Board Makes Tough Choices 12.07.16
The Martin County Taxpayers Association applauds the recent efforts of the School Board to negotiate a reasonable settlement with the district. The former agreement with the district was unsustainable.
It turns out that the retirement packages were becoming more and more expensive and taking precious dollars out of the operating funds. These increases are driven largely by increased health care costs. The historical method of using a “pay as you go” system to meet retiree costs, where current revenues pay for current costs, was putting a huge burden on operational costs. Simply put, the current revenues have been outpaced by large increases in current costs. Martin County School District currently has in excess of $180 million in these types of liabilities and much of it is unfunded.
The Martin County School Board has been debating the issue of increased costs of retire health care benefits for over a year. These retiree health benefits are costing the district approximately $2.5 million per year and increasing each year.
The real question was, how does the board balance the needs of the retirees with the needs of the current work force. In other words, how could they create a sustainable system that protects both the retirees and the current employees.
To answer that question here is an outline of the compromise.
Retirees under the age of 65 will receive the benefits at the same rate provided to current employees.
Medicare eligible retirees will receive a Health Insurance Subsidy of $5.00 per year of service, up to $150.00. This essentially mirrors the benefit provided by the Florida Retirement System (FRS). By way of example: a retiree with 30 years of service will receive $150.00 per month from the state FRS and $150.00 from the Martin County School Board.
Retirees will continue to be eligible to participate in the current PPO plan, but will be responsible for any amount above their combined contributions from the FRS and MCSB.
Retirees will also have the option of using their Health Insurance Subsidy to purchase an individual supplement plan or plans that meet their specific health needs.
These changes will save the school district nearly $1,000,000 annually.
We are all aware that the so-called “baby boomers” are nearing retirement and this will put even more pressure on the system. Much like Social Security, you cannot have more people taking out than paying in.
Teachers are some of the most valuable assets we have in our community and we believe they should be compensated for their hard work, and as such, we a pleased that they were able to get a raise in their salaries. However, whenever we speak of compensation with any employees we must speak of salaries and benefits, that represents total compensation.
Again, we applaud the outcome of these negotiations. We as a county or school district must strive to set up sustainable models and stop kicking the can down the road.
2016 Expectations 01.27.16
2015 brought many challenges for local governments and school boards. Less money from the state and more expenses for local municipalities. Health care and retirement costs continued to rise and unfunded liabilities continued to climb. Additionally, the failure of the sales tax referendum (by 72 votes, with over 30,000 cast) put the county in a shortfall position. The county decided to chip away at their capital shortfall ($250M plus or minus) by increasing ad valorem taxes and by the approval of a FPL franchise fee. So, what is in store for us in 2016?
After 75% of the voters in Florida voted in favor of Amendment #1, (The Florida Water and Land Legacy Amendment) the state legislators decided to use a large portion of those monies differently than the voters expected (according to the law suits). Multiple suits have been filed primarily claiming misappropriation of funds. The amendment called for one-third of real estate stamp taxes (estimated at $740 million the first year) to acquire and protect wildlife habitat, water resources and park land. However, the budget recently adopted by the legislature would spend more than $300 million of the money on salaries, vehicles and other expenses. Only $88.7 million would go towards acquisition (according to some of the lawsuits). This actually reminded us what we were promised when the legislature passed the lottery for the benefit of education. More politics as usual? Amendment #1 monies could enhance our ability to clean up our local waterways. We definitely need to move from septic to sewer near our waterways, however, we also need to clean the water going into the lake and discharging from the lake, and that takes resources and land.
All Aboard Florida
All Aboard Florida has presented us with another specific challenge. What will the impact on our county be if All Aboard Florida succeeds in their approvals and financing for their high speed rail service between Miami and Orlando? Our own property appraiser has already calculated the loss of property value in the county as well as the huge peril created by not being able to get medical and emergency equipment across the tracts from east to west or vice versa. All Aboard Florida has had many obstacles to overcome in the past few years, not the least of which is their inability to sell bonds. However, they are a formidable force and it will take a monumental effort to stop their endeavor.
Diversified Tax Base
On a positive note, property values continue to increase after their sharp decline in 2008. As mentioned previously, we are fortunate to have some high value residential real estate as well as a utility that contributes to our base. However, if we are looking for sustainability (and we should be) we must look at further diversification of our tax base. We should not depend on tourism and construction for our diversification. They have historically been the first to go in a recessionary cycle. Ironically, our schools could have a direct influence on this diversification, (along with a welcoming county atmosphere). A very good friend of ours once said “Invest in your schools and make them the best in the state, you will not need to do anything else. Good clean businesses will come”. We believe they were right. Now we just need to do it.
Consolidation of services should be a priority in 2016. Duplication between governmental bodies is simply a waste of taxpayer’s money. By way of example, we have favored the consolidation of the two fire/rescue departments and are looking forward to the results of the study that is near completion. We hope that more of these efforts with take place in 2016.
We, as taxpayers should be knowledgeable about our local governments. We hope you reach out to your local elected officials and get engaged in the governing process.
What is the CRA Challenge? 06.22.16
CRA (An acronym for Community Redevelopment Area) is a dependent special district established pursuant to State law by local government. CRA’s are specifically described geographic areas throughout the county that have been targeted for redevelopment. Most of the areas have some sort of challenges that have negatively affected property values in their respective areas. Lack of improvements such as drainage, utilities, sidewalks, roads, etc. are some of the issues that may cause an area to be designated a CRA.
Typically, the CRA’s have received funds through grants and other general revenues that have been invested in these areas to overcome some of the challenges that have been identified in each area. When those improvements have been built and when values begin to increase that increase in tax revenue can then be reinvested back into the areas for greater returns.
The best example of a successful CRA in the area is the City of Stuart. Not long ago the downtown area was full of vacant empty spaces. The City obtained a grant and created a CRA that provided the necessary infrastructure to stimulate the redevelopment of downtown. This contributed to the success of the Lyric Theatre and stimulated others to open retail shops that are to this day unique to the area. Today we believe that the downtown area is the “Jewel” of Martin County producing tax revenue and jobs that were absent before the implementation of the CRA. Recently the grant and TIF funding directed at Colorado Av. has shown an instant rejuvenation of the surrounding properties.
We bring up this example because we believe the use of CRA’s are an important component of our governance in the county and believe the end result produces better communities as well as additional revenue through increased property values and sales tax. County’s heritage is seen in its historic downtowns and should be restored and preserved for the future.
CRA’s receive about 10 additional points from the state when applying for Community Development Block Grants. This represents approximately 10% of the points available which translates into an enhanced probability to receive the funds. Every CRA in the county is in the urban service area and they all meet the comprehensive plan guidelines.
There are currently 7 CRA’s throughout Martin County and all of them have had improvements of some sort that have added value to their particular areas. All of the CRA’s have had local input and have been driven by their respective communities.
Currently there are discussions at the county level concerning the relevance of the CRA’s and the use of the additional revenues produced by those CRA’s (These are increased tax revenues as a result of the capital improvements made in the CRA itself). When the CRA’s were formed 95% of the additional tax revenue were reinvested back into the CRA’s. Currently the county has reduced that to less than 50%.
One of the most critical benefits of the CRA’s is local decision making. NAC boards are appointed by the commission and they have the responsibility to recommend improvements that are particular to that CRA. Local taxpayers should know best which improvements would be best suited for their particular CRA.
There are additional concerns if the CRA’s are collapsed. Currently there are rumors about certain geographic areas forming their own municipalities. This is primarily due to the perception that there is a lack of attention given to them by the county. If the county decides to abolish the CRA’s this will provide more ammunition for these areas to split and form their own governments. At the end of the day, this simply adds more layers of government and increased costs to the taxpayers that possibly could be avoided.
The MCTA supports the use of CRA’s at the county level and believes that the creation and development of the CRA’s will (in the long run) create a better Martin County and produce greater tax revenues for all of us.